Review

Yesterday’s cash session opened inside the initial green zone on hugely negative NYSE TICK and flushed through the overnight low quickly but reversed just as quickly back through the opening price creating a short squeeze on an already extended downside overnight. As highlighted above, the initial red zone was a confluence of the London open swing low and breakdown point later in the morning. Volume was high at 2.7m contracts.

Today the overnight range so far is 3238.75-3263.75, still inside yesterday’s range. I’m looking to avoid trading in the middle of this range as could easily get chopped up, but instead wait for opportunities around the edges if it looks like a consolidation day, or look for pullbacks on trending moves.

This is my first week back trading ES after a long break, so I’m better off being patient and get into the flow of the market gradually. Trying not to let any opinions about the coronavirus outbreak is difficult but ideally be guided by what information the market is giving. My gut feeling is this could escalate into something major which in turn would push the over extended and heavily index positioned market over a cliff, and be a proper test of market liquidity. However, we could see some very aggressive rallies ahead of that so will try to let go of any news bias. FOMC tomorrow as well just to throw in the mix.

Zones of interest today are: